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Paying debts good for the country and it increases money circulation

Non-payment of debts by both National and County governments has reached an all high level and the public are raising concern, saying the situation has started affecting the economy, and has contributed to slow circulation money in the country.

The Chairman of Small and Medium Enterprise ( SMEs) in Nakuru County, Johnson Ndegwa said the growth of small business and farming was being hindered by nonpayment of debts, which he claimed has also contributed to the lack of money in wananchi’s pockets.

He said, whenever, small business such as restaurants fail to pay the farmers for their deliveries it has a net effect on the economy and in some circumstances the hoteliers also claim that they haven’t been paid by their customers, who in most cases are County Government officials who order for outside catering of tea or lunches for their visitors but take too long to pay.

Ndegwa regretted that the habit of holding other people’s money has now become too common to be ignored and others cleanse their negative behaviours by justifying the fact that even the government has debts.

He urged the implementers of the Building Bridges Initiative to come up with stringent measures and faster means of debtors paying their debts, to increase the velocity of money circulation in the country.

The Chairman said the debt was created by borrowing and annihilated by payment once it is matured, and that creates a continuous transfer of debt among debtors, which he described as debt circulation.

He added that the velocity of money circulation is determined by the expending behaviour of traders, while the velocity of debt circulation is associated with the payment behaviour of debtors.

Consequently, he said, the aggregate income can be decomposed into two parts; one comes from money circulation and the other from debt circulation.

Ndegwa said the justification for not paying debts was creating bad blood between those who have borrowed and those who were owed money.

“Whenever, we read in newspapers that a relative has injured a debtor over as little as Sh.50, we tend to blame the person who has caused the injury and forget the cause, which maybe has agonized the aggressor for so long. Also, it’s wrong to belittle the amount since the owner worked for it,’’ he added.

He said even the good book the Bible, cautions against holding other people’s money for too long because he was aware that it ends up creating enmity.

“The accusation of young people who are on constant debts with mobile money, which they use to enjoy themselves, is enough proof that the country was getting to serious money circulation levels, and adopting bad habits, which may take too long to change,’’ he said.

He appealed to schools to teach children on money circulation so that they may grow up knowing that not paying their debts has a negative effect on the economy.

Ndegwa  added that he has been to harambees where senior people pledge donations both in cash and kind but they willingly ignore to honour their pledges and that transmits the negative behaviour to the younger generation.

He said country people laugh over stories, where children are taught from a young age to lie to their parents’ debtors that they aren’t inside the house or premises, without considering the consequences of it.

The Chairman added that over time newspapers have drawn cartoons of debtors, hiding under tables whenever they hear the voices of lenders.

He added that chasing debtors was not only an expensive affair but it wastes a lot of time for business people who would be doing other economic activities which benefits the state and the community at large.

Ndegwa  said it was important that the nation creates welfare police officers, under the umbrella of BBI to reduce the agonizing long process that lenders go through, while chasing debtors.

He gave an example of civil servants and other workers who after being transferred to other towns, sometimes vacate rented houses at night to avoid clearing their rents and in some cases with backlog, after having cheated landlords that they were facing a financial crisis.

Ndegwa added that such workers even go to the extent of taking sukuma wiki, tomatoes and onions on credit, with no intentions of ever paying and that affects the business of mama mboga.

He urged wananchi and the government to perceive payment of debts on time as not only a holy thing but a virtue which enables economies to blossom and inculcates positive money handling behaviour.

The Chairman appealed to the County Governments to clear debts which have caused untold suffering to business people and their families in the counties, despite the many directives by the executive that they should be paid immediately.

He urged the judiciary to consider criminalizing nonpayment of debts instead of the current situation where it is handled as a civil matter in the law courts

By  Veronica  Bosibori

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